Corporate India unsure about short-term growth

Mumbai: Corporate India does not share an optimistic outlook for the economy in the short term, according to business confidence surveys conducted by the Reserve Bank of India and two other agencies.

As per the RBI's industrial outlook survey conducted during June 2007, the business expectations index based on assessment for April-June 2007 declined by 5.8 percent over the previous quarter.

On a year-on-year basis the indices based on assessment and expectations were lower by 4.9 percent and 4.3 percent, respectively, than a year ago.

The decline in expectations index for July-September 2007 was attributed to the fall in net responses for most of the parameters of the survey such as overall business situation, production, working capital finance, order books, capacity utilization, exports, employment and profit margin.

Net responses were, however, higher than the previous quarter in the case of imports and selling prices. For most of the parameters, the maximum proportion of respondents was placed in the category no change in expectations over the preceding quarter.

The survey conducted by the National Council of Applied Economic Research (NCAER) in June 2007, also indicated a decline in the overall business confidence index (BCI) for July-December 2007 by 8.8 percent over the previous quarter.

All the four main components of the index, which includes overall economic conditions, investment climate, financial positions of the firms and capacity utilization registered a fall.